can i claim sales tax on groceries and auto insurance?

[xmasbaby0 · Accepted solution]

Sales tax is an itemized deduction.   Unless you have enough itemized deductions like mortgage interest, medical expenses, charity donations, etc. to exceed your standard deduction, sales tax has no effect on your refund or tax due.   

If you enter sales tax, there are two ways to enter it----by entering ALL of your receipts--- which YOU have saved and totaled up, or by using the "easy guide" method which uses a formula based on your income and sales tax rate.

Your itemized deductions have to be more than your standard deduction before you will see a change in your tax owed or tax refund.  The deductions you enter do not necessarily count “dollar for dollar;” many of them are subject to meeting  tough thresholds—medical expenses, for example, must meet a threshold that is pretty hard to reach. (Only the amount that is MORE than 7.5% of your AGI counts)   The software program uses all the IRS rules that apply to the expenses you enter, and it tells you if you have enough to use your itemized deductions or if using the standard deduction is more advantageous for you.  Under the tax laws that have been in effect since 2018, some deductions have been capped—there is a $10,000 limit to the itemized deductions for state, local, property and sales taxes.

Your standard deduction lowers your taxable income. The standard deduction makes some of your income “tax free.”  It is not a refund.  You will see your standard or itemized deduction amount on line 12 of your 2024 Form 1040.

2024 STANDARD DEDUCTION AMOUNTS

SINGLE $14,600    (65 or older/legally blind + $1950)

MARRIED FILING SEPARATELY $14,600    (65 or older/legally blind + $1550)

MARRIED FILING JOINTLY $29,200    (65 or older/legally blind + $1550)

HEAD OF HOUSEHOLD $21,900    (65 or older/legally blind + $1950)

[mwk1000]

Anyone care to answer the question asked ? ie Specifically if grocieries and auto insurance payments have sales tax that can be deducted .... 

[SusanY1]

Yes, when using the actual sales tax paid method for itemized deductions you may include tax paid on all items, including groceries and auto insurance.  

[xmasbaby0]

There is an answer directly above your post.   You can choose to enter all of your own receipts to total up your sales tax ------ or you can let the "easy guide" follow a formula that uses your income and your sales tax rate to calculate the sales tax deduction.   

When you go to the Sales Tax screen it asks you if you want to use the Easy Guide or if you want  Enter All of My Receipts and then you total all of your receipts and enter your total.    If you total all of your receipts, then use any receipts you have that show sales tax on them--including the receipts from the grocery store, etc.

[mwk1000]

Getting interesting STILL missing the point I think.   I think the question is : Insurance premiums and related services such as claims processing, policy management, and underwriting are not subject to sales tax in Michigan. So no you cannot deduct what does not exist. ( at least in Michigan)  I found this elswhere from -cpanerds.com

[xmasbaby0]

What point do you think we are missing?    If you know that there is no sales tax on something why are you asking if you can enter sales tax for that?   You can choose "Easy Guide" or you can choose "Enter all my receipts"  and total the sales tax you actually paid----if you have a receipt for something that did not include any sales tax then it should be obvious to you that you do not include anything from that receipt.  You only use receipts that show sales tax---not receipts for everything you paid for all year.